Chapter 6 - Supply, Demand, & Government Policies Flashcards
1
Q
Price Ceiling
A
A legal maximum on the price of a good or service
2
Q
Price Floor
A
A legal minimum on the price of a good or service
3
Q
Taxes
A
Government can make buyers or sellers pay a specific amount on each unit
4
Q
Shortages & Rationing
A
Some rationing mechanisms:
- Long lines
- discrimination according to sellers’ biases
5
Q
The Incidence of a tax
A
How the burden of a tax is shared among market participants
